VietNamNet Bridge – A number of banks have unveiled real-estate loan packages targeting feasible property projects and mortgages to intensify credit growth.

A customer borrows money from HDBank. Several banks have started to lend more to the real estate sector.

Oceanbank has launched a package called niem tin (belief) that carries an interest rate of just 5.91 per cent for the first six months.

The bank will disburse the loan in stages as the developer makes progress on the construction.

A bank spokesperson said the "belief" that banks have in the real estate market and buyers have in developers could help revive the market.

"We expect the package to help thaw the frozen market, which has thousands of unfinished apartments," he said.

BaoVietBank has launched a loan product that promises to return customers' loan repayments and pay a penalty if their apartment is not handed over in time by the developer.

But it is applicable only for the Ha Dinh Tower (Ha Noi) being built by 135 Investment JSC.

Besides, most banks also offers loans to fund house repairs. Banks say customers who borrow for this purpose usually repay the loans, often ahead of time.

Bad debt a big risk

In the first half, bad debts related to property rose by 6.4 per cent at banks.

The Oceanbank representative said banks do not dare to lend massively to the property sector or carelessly like they did three or four years ago.

Though they want to lend money now, they would only do so after ensuring the creditworthiness of a customer.

Independent banking and financial expert Nguyen Tri Hieu blamed the increase in bad debts on old loans, saying most banks should be very careful about new property sector loans that few go bad.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said though banks' credit growth target for this year is just 12 per cent, not all can achieve this goal.

A 5-6 per cent growth rate is acceptable, he added.

Eximbank's outstanding property loans have increased 4-5 per cent this year.

A bank spokesperson said it may have plenty of room left for credit growth but it does not plan to intensify lending to property developers, only home buyers.

Phan Huy Khang, general manager of Sacombank, said outstanding loans to the real-estate sector account for only 20 per cent of total credit.

Yet it would only lend for feasible projects and focus more on mortgages for home buyers, he said.

Source: VNS